We recently published a list of the 10 Safe Dividend Stocks with Yields Above 5%. In this article, we are going to take a look at where Verizon Communications Inc. (NYSE:VZ) stands against other safe dividend stocks.
Dividend-paying stocks have long held a special place among investors, often delivering stronger returns than the broader market over time. Within this strategy, there’s an ongoing debate between those prioritizing high yields and others who focus on companies with a steady track record of dividend growth. While analysts tend to favor firms that consistently boost shareholder payouts, the allure of high yields remains strong. Experts caution, however, that investors should avoid yield traps and instead target companies that combine attractive yields with reliable dividend increases.
A study by Newton Investment Management lends weight to the case for high-yield stocks. It found that during inflationary periods from 1940 to 2021, high-yield dividend stocks outpaced the broader market. The report also showed that portfolios with high-dividend-yielding stocks performed better than those with little or no dividend exposure. Specifically, high-yield portfolios outperformed low-yield portfolios by 199 basis points and zero-yield portfolios by 330 basis points in terms of value-weighted returns. However, the study didn’t explore the specific market conditions behind these results, offering more of a general overview.
Further backing the benefits of high-yield stocks, Hartford Funds conducted research looking at risk and return over the long haul. From December 1969 to March 2024, high-yield portfolios returned an average of 12.3% annually, compared to 10.5% for mid-yield and 9.7% for low-yield portfolios. When measured by annualized standard deviation—a common gauge of volatility—high-yield portfolios also showed lower risk (14.1%) than their mid-yield (16%) and low-yield (20.8%) counterparts.
Analysts note that dividend stocks can offer a layer of stability during market turbulence, especially when investors prioritize income. Still, they advise sticking to high-yield stocks only if they come with a proven record of dividend growth.
That said, this isn’t a hard rule. Many companies manage to offer both solid yields and consistent dividend increases. High yields, in themselves, aren’t a red flag—in fact, dividend yield plays a vital role in income-focused investing by showing the income potential relative to a stock’s price.
Amid the growing excitement around AI and tech stocks, dividend-paying companies have somewhat fallen off investors’ radar. However, the recent market downturn has brought them back into focus. Since the beginning of 2025, the Dividend Aristocrats Index, which tracks the performance of companies with 25 consecutive years of dividend growth, has fallen by over 2% while the broader market has slipped by nearly 10%.
